THE PRESIDENT: Thanks a lot for the warm welcome. I'm so grateful
so many of my fellow citizens have shown up this morning. Thanks for
coming. I'm here to discuss some of the challenges that this nation
faces and to let you know I'm optimistic we can overcome anything in
our path. (Applause.)

We have a challenge to make sure that we have economic security
here at home. That's one of the challenges we face, and I will discuss
that challenge. We also have a challenge to protect our fellow
citizens from terrorism.

Today's attacks in Saudi Arabia, the ruthless murder of American
citizens and other citizens, remind us that the war on terror
continues. My thoughts and prayers and those of our fellow citizens
are with the families of the victims of yesterday's murder in Saudi
Arabia. We pray for them. We mourn the loss of life. These
despicable acts were committed by killers whose only faith is hate.
And the United States will find the killers and they will learn the
meaning of American justice. (Applause.)

I want to thank the Chairman, Dick Lugar, for his service to our
country and for his friendship. He's a fine, fine man. (Applause.) A
member of my Cabinet has joined us here today, my man, Mitch.
(Applause.) Mitch Daniels has been a good friend, a close advisor, and
I'm going to miss him. Washington's loss, however, will be the gain of
the people of Indiana. He's a fine fellow. (Applause.)

I appreciate very much that Governor O'Bannon has joined us today.
Mr. Governor, thank you for coming. I'm honored you are here.
(Applause.) And I'm appreciative that Indiana's other Senator, Senator
Evan Bayh has joined us, as well. Senator, thanks for coming.
(Applause.) I appreciate you coming.

I'm proud that members of the Indiana congressional delegation have
joined us, as well. Chris Chocola, from up north, has come to be with
us today. (Applause.) Steven Buyer, Congressman Buyer is with us
today. (Applause.) Congressman Dan Burton is with us today.
(Applause.) Congressman Mike Pence is with us today. (Applause.) And
I'm also very pleased that Congresswoman Julia Carson is with us, as
well. (Applause.)

We've got members of the statehouse who are with us. The state
attorney general is with us, and other members of the statehouse --
thanks for coming. Mr. Mayor of Indiana -- Indianapolis, I'm honored
you are here, that Mayor Peterson has taken time out of his day to
greet me. (Applause.)

I just had the honor of talking to some of your citizens about what
tax relief will mean to them. I'm going to talk about some of them a
little later on. But I want to thank you all so very much for taking
time out of your day to kind of tell me what life's all about here.
(Laughter.)

Last night when I landed I met a lady named Elizabeth Hamilton.
She is -- the reason I bring up Elizabeth is because I want you to
understand that the true strength of America is not our military or our
ability to bomb people. The great strength of our country is the fact
that we love each other. (Applause.) The great strength of America is
that we're a compassionate nation. (Applause.)

There's been a lot of talk about our military, but I want you to
remember that the thing that makes this nation strong is the fact that
we have citizens like Elizabeth Hamilton who are willing to love
somebody just like they'd like to be loved themselves. You see,
Elizabeth is a reading tutor. She's willing to take time out of her
life to help a child learn to read. She understands a society -- a
hopeful society is one in which we work hard to save lives, one person
at a time. (Applause.)

She -- not only that, but she works at the Chris DeMor (phonetic)
House, which is a house -- a center aiming to serve people in need, to
help people who hurt. Elizabeth, thank you for coming. I'm honored
you're here. Please stand up. (Applause.) And for any of you who
want to follow the path of Elizabeth Hamilton -- we've got what's
called the USA Freedom Corps. You can look it up on the Internet if
you're interested in helping somebody in need. If you really want to
make this country a strong country, volunteer. Help somebody who
hurts. Love a neighbor just like you'd like to be loved yourself.
(Applause.)

This nation has been tested. For 20 months, we have waged a
relentless campaign against global terror. You see, the enemy hit us,
and they didn't realize the nature of this country. They probably
thought we would just fold our tents and go home. They don't
understand America. They don't understand how much we love freedom.
They don't understand how much we cherish -- (applause). They probably
thought we would forget. But anytime anybody attacks our homeland,
anybody -- anytime anybody attacks our fellow citizens, we'll be on the
hunt, and we'll find them, and they will be brought to justice.
(Applause.) Just ask the Taliban. (Laughter.)

We went into Afghanistan, not all that long ago when you think
about it, to uphold a doctrine that said, if you harbor a terrorist, if
you hide a terrorist, if you feed a terrorist, you're just as guilty as
the terrorist and you'll be held to account. (Applause.)

So we, along with a vast coalition, went into Afghanistan to bring
people to justice, but also to free people from the clutches of one of
the most barbaric regimes in modern history. And now, thanks to the
United States of America, and a lot of our friends, young girls go to
school for the first time. I'm proud of this country and what we stand
for. (Applause.)

I figured we've destroyed about one-half of al Qaeda, the top
operators of al Qaeda. And that's good. But we've got more work to
do. And the other half are going to get on the run, and we will find
them. In order to protect this homeland, the best way to protect the
homeland is to hunt down anybody who would do harm to Americans and
bring them to justice, and precisely what we're going to do in
America. (Applause.)

We will be patient and we'll be relentless, because that is our
obligation to future generations of Americans -- an obligation which
says that we must work hard to make sure people can grow up in freedom
and peace in this country.

We also waged another battle in the war against terror when we
liberated the people of Iraq from the brutal regime of Saddam Hussein.
(Applause.) Thanks to our United States military and coalition forces,
America is now more secure, the world will be more peaceful, and the
Iraqi people are free. (Applause.)

America is proud of our military. (Applause.) We are proud of
their skill; we're proud of their courage; we're proud of people like
Army Corporal Damian Luten (phonetic), who went to high school right
here in Indianapolis. On March 23rd, he was in a supply convoy in Iraq
that came under attack. He was wounded. He was taken prisoner, and,
thank God, he was rescued. (Applause.) He now has the Purple Heart.
But, more importantly, he, like everybody else who wears our uniform,
has the gratitude of the United States of America. (Applause.)

And I know our troops are grateful for the support they found in
places like Indianapolis. (Applause.) At the public library on
Washington Street, a group of grandmothers got together and knitted
scarves for our soldiers to keep the desert sand out of their eyes.
What struck me was what 72-year-old Tilly Caldwell had to say. And
here's what she said -- her words, not mine -- "What else are a bunch
of old ladies going to do? -- (laughter) -- If I could, I would be the
first on the front line with a rifle." (Applause.) Whoever knows
Tilly, tell her I'm glad we're on the same side. (Laughter.)

We moved into Iraq, we removed the dictator, but we've got work to
do. First, we're going to help rebuild the country, make sure the
people have got food on the table, make sure the children can go to
school, make sure those who need medical supply can find medical
supply. We're going to turn the lights on all around the country so
that life can return back to normal. And then we'll work with the
Iraqi people to have a government of, by, and for Iraqi citizens.
We'll work to make sure that democracy takes hold, because we believe
people everywhere love freedom. And then we're coming home.
(Applause.)

A free Iraq will make the world more peaceful, because, you see,
when people are free, they're less likely to promote terrorism. When
people are free, they're more likely to work to realize their
aspirations in a positive way. Freedom around the world will bring
peace, and that's why America stands so strong for free people
everywhere across this globe. (Applause.)

We will work hard to make sure the homeland is secure and freedom
prevails. And, likewise, we'll work home -- to make sure everybody can
find work in America. I saw the other day that the unemployment rate
went to 6 percent. That should be a clear signal to reluctant members
of the United States Congress that we need an aggressive economic
growth plan so people can find work. (Applause.)

People can say -- they say, well, if the unemployment rate is going
up, how can you be optimistic? And my answer is, because we've
overcome a lot and we're still growing. I want to remember what this
nation has been through. First of all, in March of 2000, the stock
market started going down. That affected a lot of people because we're
an ownership society. Now, over 50 percent of our fellow citizens have
got an interest in the stock market. You either own stock directly or
your pension plan owns stock. If you're a police officer -- and thank
you for serving your community, by the way -- you've got interest in
the stock market because of your pension plans. If you're a retired
teacher, you've got interest. If you're a retired citizen, you've
probably got some interest in the market. And the market started going
down in March of 2000.

And then our nation went into a recession, starting January 1st of
2001. That means three quarters of negative growth, three quarters of
going backwards. And then, just as it looked like things were kind of
getting better, the enemy hit us. That affected America; it affected
us deeply. It hurt our economy in a lot of ways. We started getting
settled down after that.

And then it became clear, over the past years, some of our citizens
forgot what it meant to be a responsible citizen. Some CEOs around our
country forgot what it meant to be responsible in their jobs. They
didn't tell the truth to employees and shareholders alike.
(Applause.) They will learn a lesson, that we expect people to be
responsible in positions of authority. They will be held to account.
(Applause.) And this should serve as a lesson for people in positions
of responsibility. It should serve as a lesson for other chief
executive officers of corporate America that we expect there to be open
accounting and fair compensation packages. We expect there to be
responsible behavior in America's corporate boardrooms. (Applause.)

Now, we've been working our way through problems. And in spite of
those problems, we're growing. As a matter of fact, we're growing more
than most other countries in the industrialized world. And that's
positive news. What isn't positive is the fact that too many of our
fellow citizens are looking for work. What's not positive is some of
your fellow citizens are saying, what can I do to put food on the table
for my family. And when people are looking for work, it says, we've
got a problem and we need to do something about it.

And so I went to the United States Congress and said, here's my
plan, here's what I want you to consider. I want you to consider how
to make this economy grow. I want there to be one thing in your mind
when it comes to debating what's right or wrong, and it's not politics,
it's helping people find a job in the United States of America.
(Applause.)

And I've put a plan out that recognizes our strengths. First of
all, the entrepreneurial spirit is strong in America. This is a
country where if you've got a dream and are willing to work for it, you
can achieve that dream. And we've got to keep that entrepreneurial
spirit strong in this great country. (Applause.)

Interest rates are low. That's a strength that helps the homeowner
either buy a home or refinance a home. We want people owning their
homes in America. And interest rates -- low interest rates help people
own a precious asset like a home. Inflation is down, which is
positive. But the best thing we've got going for us is we're the most
productive work force in the world. Our workers are the best in the
world. (Applause.)

That's good news, and it can be bad news. And one of the reasons
it's bad news is, the more productive the work force -- in other words,
each worker can produce more goods and services per hour -- it means
you'd better increase the demand for goods and services if you want to
increase employment. The more productive we are, the more the economy
has to grow in order for somebody to find work.

The best way to encourage -- increase demand for goods and services
is to let people keep more of their own money. (Applause.) You see,
when somebody has more of their own money, they're likely to make a
decision on a good or a service. They say, I want more of this, or, I
need an additional good, in which case somebody is likely in our system
to produce it. And when somebody meets that demand by additional
production, somebody is more likely to find a job. And we're here to
talk about one thing -- jobs. That's what we're here to talk about.

So I submitted a plan to the United States Congress that focuses on
jobs. First of all, when the key parts of this plan is that it
understands who's money we're talking about. Sometimes in Washington,
you hear the rhetoric, well, we're spending the government's money.
Now, you don't spend the government's money in Washington. We're
spending your money. It's your money we're talking about. (Applause.)

And so I said, let's let the people keep more of their own money.
In 2001, the Congress responded. It cuts rates on everybody. That's
fair. If you're going to cut the rates, you cut them on everybody.
Government shouldn't pick and choose winners when it comes to tax
relief. Secondly, it said the marriage is not a good thing. We ought
to encourage marriage, not discourage marriage. (Applause.) And the
third aspect of the plan, I said we ought to increase the child credit
from $600 to $1,000 per child. (Applause.)

And so, Congress listened in 2001 and passed the plan, except they
phased it in over a period of years. And my attitude is this -- if the
economy is hurting today, if we've got some of our fellow citizens
looking for work, instead of waiting five years, let's do it today.
(Applause.) The person looking for a job doesn't care what happens five
years from now. The person looking for a job wants the economy to grow
today. For the sake of economic vitality, Congress has got to act, and
act boldly, on this plan to get more of your own money back to you.

And people, you'll hear all the time in Washington, they'll say,
well, this is only for a certain class of people. That's the old,
tired, stale class warfare argument. (Applause.) A family of four
making $40,000 a year would see their federal tax bill go down from
$1,178 a year to $45. (Applause.) That's a family of four, making
$40,000. And that's $1,000 not just for one year, but for years. And
it gives that family a chance to plan. It basically says that family
can use their money the way they see fit. After all, it's your money
to begin with. (Applause.)

This plan is important for the small business growth. It's
important to kind of keep that entrepreneurial spirit strong in
America. And I'll tell you why. Most small businesses pay tax at the
individual income tax rate level. Most small businesses are limited
liability corporations and, therefore, they pay tax at the individual
rate -- or, subchapter-S corporations, or sole proprietorships. Your
mom-and-pop small business is more likely to pay tax at the individual
income tax rate. And, therefore, when you lower those rates, when you
lower all rates, what you're really doing is injecting capital into the
treasuries of American small businesses. And the reason that's
important is most new jobs are created by small businesses in America.
(Applause.)

So when you hear the debate about reducing all tax rates, I want
you to remember that a crucial part of this plan focuses on the
American entrepreneur and the small businesses. And part of the plan
says, we're going to raise the amount of money that a small business
can deduct on a capital expenditure. In other words, if you buy new
equipment right now, you can only deduct up to $25,000. So we're
saying you ought to be able to deduct up to $75,000. (Applause.)

Yesterday I -- it is clear we've got some small business owners
with us, who understand the limitations placed on investment.
(Applause.) Well, if that's the case, you're some of the 497,000 small
businesses right here in the state of Indiana. It seems like to me
you're a good place to be a small business owner, which is exciting.

I was yesterday -- started in Albuquerque, and met a fellow who
started his own garage. And he started with two employees, now he's
got -- I forgot how many he said, a couple of dozen, which is
incredibly positive. He said to me, with the increase on the ability
to write off more of my capital investment, I'm going to increase my
garage space, which means somebody has got to provide the concrete to
pour the foundation, somebody has got to figure out where to buy the
metal, somebody has got to make the metal. Then he's going to need
some extra employees to make sure the garage space isn't empty.

In other words, what I'm telling you is, is that by encouraging
small businesses to invest capital, really what we're doing is we're
increasing the ability for somebody to find work. The more people are
buying goods and products in our society, the more production there
will be of those goods and products, and the more likely is one of your
fellow citizens who's looking for work will be able to find a job.
This is all about jobs. (Applause.)

And the final aspect of the jobs and growth package is to get rid
of the double-taxation on dividends. (Applause.) And there are a lot
of reasons why we should. First of all, it's fair to tax corporate
profits. If a company makes money, it is fair that we collect a tax
from that company. It doesn't seem fair to me, however, that if the
company distributes a share of those profits to the owners, small and
large alike, that we ought to tax the profit again. That's not fair.
(Applause.)

As a result of the double-taxation, shareholders who receive a
dividend keep as little as 40 cents on the dollar earned, which raises
the cost of capital. It makes raising capital more expensive, and
that's not good for society which is interested in creating more jobs.
It doesn't make sense to tax anything twice. It certainly doesn't make
any sense to tax anything twice and, therefore, make it harder for
somebody to raise capital necessary to expand their business, so
somebody can find work.

It is very important, also, to realize the reform aspects of
encouraging companies to pay dividends. If you get rid of the
double-taxation of dividends, more companies will pay dividends.

We just went through a period of time when some of our corporate
citizens said, invest in my company because I've got an interesting
story. I would call that the pie-in-the-sky economic period. You
know, bet on us; even though we don't have any cash, we've still got an
interesting tale to tell. You know, the new economy. The problem is,
the new economy was affected by old accounting practices. And when
companies didn't have any money, eventually they went out of business.
Well, if you have a dividend-paying society, you can tell an
interesting story, but you also better have enough cash to back your
story up. A dividend society is one that says, we've got a good story,
but we also have got enough success where we can distribute cash to the
owners on a quarterly basis. A good corporate reform will be to
encourage companies to back up their performance with cash distribution
to the owners. (Applause.)

And who are the owners? The owners are from all walks of life.
I've just told you we're an ownership society. If you have a pension
plan, you're a -- you own stock. If you have a -- if you're a retired
teacher, you're interested. There's a 177,000 seniors in this day who
rely upon dividends to meet their financial needs.

Oh, I've heard the rhetoric coming out of Washington, this is only
for rich people, that's why he's doing it. Well, Janet Herke I met
today. She has six grandchildren. Every month she sets aside $100 to
help her children eventually pay for her grandchildren's education.
She is a responsible citizen. She's retired. She relies upon dividend
income. Getting rid of the double-taxation of dividends will save this
good lady $1,800 a year, for the out-years, as well. And the savings
mean this to her -- this is what she said -- "I want to pass along what
I've invested and save for my kids and grandkids, because they are the
most important things in my life." Now, you tell Janet that this
getting rid of the double-taxation of dividends is only for rich
people.

I met with Wilbur and Doris Richards. (Applause.) I met with the
Richards'. Wilbur is an Army veteran. He helped liberate World War II
-- Europe in World War II. Doris worked in local schools here. They
worked hard. The proposal would cut their taxes by 70 percent, and at
$800 more a year, which would help them pay for health insurance. It
certainly eases the pressures that now exist on their life. Wilbur
says he gets the most out of everybody. And my tax relief plan would
give him and seniors like him more bucks to work with -- his words, not
mine. (Applause.)

Dena Kerhoulas is here with us. She's the lady who's got the same
hair style as my mother. (Laughter.) And sounds just about as
feisty. (Laughter.) Right after September the 11th, here's what she
did -- September the 11th, 2001, she bought more stocks, because, she
said, I wanted to show them they don't have us whipped. (Applause.)
She has stocks that pay dividends, like a lot of seniors do. These
aren't overly rich people. They're rich in spirit, but they're what we
call average in wealth. She'd save $2,000 a year, money she could use;
money that when she spends, will help somebody find work.

I met the Grubbs family and the Knights. Same story over and over
again all across America. Getting rid of the double-taxation of
dividends will help our senior citizens, and that's good policy.
(Applause.)

I proposed an aggressive plan, because I want more people working.
I proposed a plan where the -- some economists say will add a million
new jobs by the end of 2004. We don't need tepid steps in Washington,
D.C.; we need plans that will get this economy growing strong so our
fellow citizens can find a job. (Applause.)

There's all kinds of reasons why people don't want to support a
strong plan. One of the most -- one of the ones you hear the most
about is that it will cause a deficit. Let me discuss that with you
right quick, if you don't mind. Sure, we're in deficit. We're in
deficit. We're in deficit because we went through a recession. I
explained to you what the country had been through. The stock market
went down, starting in March of 2000. That means less revenues coming
into our Treasury when people sold their stocks. We went through a
recession, which means the economy slowed down to the point where
there's less revenue coming into the Treasury. Yes, we're in deficit
because we've got less money coming in.

We're also in deficit because I made a promise to the people who
wear the uniform of the United States military, if we put you in harm's
way, we will spend what is ever necessary to make sure we win.
(Applause.)

We will deal with the deficit. There's a couple ways to deal with
it. One way is to raise your taxes, and that's not going to happen.
(Applause.) The other way is to do two things. One is to control
spending. (Applause.) It's to be responsible with your money. It's
to send clear priorities, and say to the Congress, here are the
guidelines, here's what we expect you to -- here's what we expect
you to honor, and that is, in this case, no more than 4 percent
increase in discretionary spending. In other words, there needs to be
fiscal sanity in Washington, D.C. -- (applause) -- and at the same
time, have policies which grow the economy so we can get more revenues
coming into the Treasury. If you're interested in the deficit, you
ought to be supporting fiscal discipline on the one hand, and
aggressive policies to make sure people can find work on the other
hand. (Applause.)

I'm optimistic we're going to make good progress in Washington. I
want to thank the House of Representatives for voting on a good plan.
It's a good start. And now it's up to the Senate to follow suit. I
believe the Senate, when they hear from you, will follow suit.
(Applause.) I believe the people in the elected office need to hear
from our citizens. (Applause.)

I look forward to signing a good bill, one that will help people
get back to work. I look forward to signing a good piece of
legislation which will rekindle the entrepreneurial spirit of this
country. I look forward to signing a bill that will help America
remain strong. And there's no doubt in my mind we will.

I'm confident that the future that lies ahead is a positive future
for all our citizens. I'm confident that because of the United States
of America, the world will be more free. I'm confident that if we
remain strong like I know we will, the world will be more secure. And
I'm confident, thanks to the strength and the compassion of our
country, the world will be more peaceful. And the reason I'm so
confident is I realize that I'm the President of the greatest nation on
the face of the world. (Applause.)

Thank you all for coming. God bless, and God bless America.
(Applause.)